The Impact of COVID-19 on Household Finances.

Mintel reports that the UK will see a two-track recovery and further deepening of inequalities, as a result of the COVID-19 pandemic.

Since the pandemic began, household finances has changed for many. Some saw their finances boost, as they began working from home and had reduced outgoings, others saw financial difficulties as earnings reduced as a result of furlough.

Now with the nation re-emerging from lockdown, consumers have continued to put off major purchases, however, saving deposits have remained elevated. On the other hand, with unemployment increasing, some households expect further financial difficulty as state support schemes ends.

Furlough has Saved Millions of Jobs from Redundancy

According to Mintel reports, while unemployment has risen to 5.1% in Q4 2020, it could have been a lot higher if it was not for the furlough scheme, with 17% of workers being furloughed at some point in the pandemic. The increase in remote working has also been a huge factor, allowing many professional services to continue to save money for the future.

As a result, two thirds of non-essential spending has been cut down by two thirds in the UK, which suggests that the public are saving for their post-pandemic priorities.

Post-Pandemic Priorities

After months of living under tight restrictions, statistics show that UK consumer post-pandemic priorities show a preference in experiences over major purchases. With that being said, for many their priorities lie in saving for emergencies/ unexpected expenses and saving for long-term goals, such as buying a house.

These statistics show promise that people have changed their views on money from a means to spend to a means of protecting themselves against uncertainty in the future.

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